EFFECT OF TAX ENFORCEMENT MECHANISMS ON COMPLIANCE BEHAVIOUR OF SMALL AND MEDIUM SCALE BUSINESSES IN JOS METROPOLIS

Abstract

This paper assessed the effectiveness of tax enforcement mechanism as tool for enhancing tax compliance in the Plateau State Board of Internal Revenue Services (PSBIRS), Nigeria. Survey research design was adopted using primary data sourced through administration of structured questionnaire on 192 respondents from among staff of Plateau State Board of Internal Revenue Services within which 176 were filled and returned. The Taro Yamane formula was applied to arrive at the sampled respondents. Outcome of multiple regression analysis showed regression coefficient and p-value of tax audit, tax penalty, tax amnesty and tax education respectively, indicating a positive and significant relationship of the four explanatory variables with tax compliance. The Implication is that a marginal increase in tax audit, tax penalty, tax amnesty and tax education will lead to increase in tax compliance in Plateau State Board of Internal Revenue Services. As such, the study recommended that tax audit, imposition of tax penalties; tax amnesty and tax education is encouraged and sustained. These are envisaged to further improve the degree of tax compliance, consequently enhancing government tax revenue generation to augment dwindling oil revenue in Nigeria. Overall, the welfare of tax officials should be evaluated in order to urge them to be more transparent. Furthermore, the government should demonstrate sincerity in the use of tax revenue, since this will increase tax payers' trust in governance; these, and many other factors, will inspire willingness to comply with tax obligations in Nigeria.